Marginal note:Directors not officers

Marginal note:Two or more offices

Standard

Marginal note:Obligation

16(1) Every director and officer of the Board in exercising any of the powers of a director or an officer and in discharging any of the duties of a director or an officer shall

(a) act honestly and in good faith with a view to the best interests of the Board; and

(b) exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.

Marginal note:Special knowledge or skill

(2) A director or officer of the Board who in fact possesses, or by reason of profession or business ought to possess, a particular level of knowledge or skill relevant to the director’s or officer’s powers or duties shall employ that particular level of knowledge or skill in the exercise of those powers or the discharge of those duties.

Marginal note:Reliance on statements

(3) A director or an officer of the Board is deemed to comply with subsections (1) and (2) if he or she relies in good faith on

(a) financial statements of the Board represented by an officer of the Board, or represented in a written report of the Board’s auditor, to be a fair reflection of the financial condition of the Board; or

(b) a report of an accountant, lawyer, notary or other professional person whose profession lends credibility to a statement made by the person.

Marginal note:Duty to comply

17(1) Every director, officer and employee of the Board shall comply with this Act and the by-laws.

Marginal note:No exculpation

(2) No provision in any contract, in any resolution of the Board or in the by-laws relieves any director, officer or employee of the Board from the duty to act in accordance with this Act or relieves a director, officer or employee from liability for a breach of the Act.

Marginal note:Directors’ and officers’ insurance

18(1) The Board may purchase and maintain insurance for the benefit of a director or officer of the Board, a former director or officer of the Board, or any person who acts or acted at the Board’s request as a director or officer of an entity of which the Board is or was a shareholder or in which the Board has or had a financial interest — and the personal representatives of that person — against any liability incurred by the person in that capacity unless the liability relates to a failure to act honestly and in good faith.

Marginal note:If no insurance

(2) If the Board does not purchase and maintain insurance under subsection (1), the Board shall indemnify each person referred to in that subsection, out of the funds, against any liability incurred by the person in that capacity, so long as the person acted honestly and in good faith.

Decisions of Board of Directors

Marginal note:Decisions

19 Apart from the meeting required by section 49, the board of directors, or any committee of the board of directors, need not have any meetings unless required to do so by the by-laws. It shall make decisions by majority vote of a quorum of members, either in person or otherwise, in accordance with the by-laws.

Conflicts of Interest

Marginal note:Disclosure of director’s interest

20(1) A director or officer of the Board shall disclose in writing to the Board or request to have entered in the minutes of a meeting of the board of directors or one of its committees the nature and extent of the director’s or officer’s interest, as prescribed,

(a) as a party to a transaction or proposed transaction with the Board; or

(b) as a director or an officer of any entity that is a party to a transaction or proposed transaction with the Board or as a person who holds a material interest in any such entity.

Marginal note:Time of disclosure for officer

(a) without delay after the officer becomes aware that the transaction or proposed transaction is to be considered or has been considered at a meeting of the board of directors or one of its committees;

(b) if the officer becomes interested after the transaction is made, without delay after the officer becomes so interested; or

(c) if a person who is interested in the transaction later becomes an officer, without delay after the person becomes an officer.

Marginal note:Time of disclosure for director or officer

(4) If a transaction or proposed transaction is one that, in the ordinary course of the Board’s business, would not require approval by the board of directors, a director or officer shall disclose in writing to the Board or request to have entered in the minutes of a meeting of the board of directors or one of its committees the nature and extent of the interest of the director or officer without delay after the director or officer becomes aware of the transaction or proposed transaction.

Marginal note:Voting

(5) A director referred to in subsection (1) shall not vote on a resolution or participate in a discussion to approve the transaction mentioned in that subsection unless the transaction is

(a) one relating primarily to the director’s remuneration as a director of the Board or one of its subsidiaries;

Marginal note:Continuing disclosure

(6) For the purposes of this section, a general notice to the board of directors or to one of its committees by a director or officer, declaring that the director or officer is a director or officer of, or has a material interest in, an entity and is to be regarded as interested in any transaction made with that entity, is a sufficient declaration of interest in relation to any transaction so made.

Marginal note:Avoidance standards

(7) A transaction between the Board and one or more of its directors or officers, or between the Board and another entity of which a director or officer of the Board is a director or officer or in which a director or officer of the Board has a material interest, is not null, void or voidable by reason only of that relationship or by reason only that a director with an interest in the transaction is present at or is counted to determine the presence of a quorum at a meeting of the board of directors or on one its committees that authorized the transaction, if

(a) the director or officer disclosed the interest in accordance with subsection (2), (3), (4) or (6);

(c) the transaction was reasonable and fair to the Board at the time it was approved.

Marginal note:Application to court

(8) If a director or officer of the Board fails to disclose an interest in a transaction in accordance with this section, a court may, on the application of the Board, set aside the transaction on any terms that it thinks fit.

Marginal note:Meaning of “transaction”

(9) In this section, transaction includes a contract, a guarantee and an investment.

General

Marginal note:No constructive notice

21 No person dealing with the Board or with any person who has acquired rights from the Board is deemed to have notice or knowledge of the contents of a document, other than an Act of Parliament or any instrument required to be published in the Canada Gazette pursuant to the Statutory Instruments Act, concerning the Board by reason only that the document is available at the head office of the Board or has been made public.